A business in crisis with a Board under pressure is no place for the inexperienced. Adaxial consultants bring their long experience to the table to help banks, stakeholders and management teams understand all the options available to them and to identify the best means of survival. The Adaxial team has an established track record of guiding businesses through difficult times to renewed growth. Firms in trouble are often slow to seek outside help, even though they know that their existing financial advisers, bankers, and accountants, have to prioritise their own interests. They are often unaware that help from specialists like Adaxial is available.
Turnaround requires the reversal of a trend of decline. Early pro-active involvement is very beneficial In achieving a successful solution. Involvement at a later stage in the process makes the task of stabilisation much harder. Radical change may be required to be undertaken simultaneously across numerous dimensions of the business. Simply trying harder with the current business model may be doomed to failure.
Our experience shows that in most cases it is desirable to work with and support existing management, by bringing to bear our specialist turnaround and commercial skills and wide ranging experience of many business sectors and types. Adaxial consultants have been at the coal face in similar situations as management teams they help. We have not been in the restructuring teams of large accountancy firms or business consultants we have been members of Boards that have come out the other side of distressed situations. We understand the need for support and guidance through difficult situations that may never have been faced previously by the management teams we help.
There are four critical aspects of the management team:
Recognition – understandably, the incumbent management team can have difficulty in coming to terms with the fact that the business strategy is not working and causing a decline of the business. There can be reality gap in not believing the situation is as bad as it actually an inherent belief that shortly things will get better. Unfortunately, they rarely do and management sometimes need help not in recognising the reality of the current situation but the need to do something about it.
Effectiveness – as the crisis deepens, management stress levels tend to increase significantly, as they feel their control on the business declining. Their effectiveness declines as a consequence. Often, activity is confused with progress and managers cling to what they know best, pushing the current business model harder, when a new business model is needed. Leadership, clarity of purpose and a well thought through turnaround plan are required to give control back to the management team, thereby reducing their stress levels and as a consequence improving their effectiveness.
Capability – for the vast majority of management teams the turnaround environment is unknown territory. They have not had the training or experience to radically re-engineer the business model and implement it quickly. They will be subject to an increasing level of intervention from financial stakeholders. The relationship the business has with its financial stakeholders will change as the business goes into the turnaround phase. Management teams may not have the experience of thinking through the issues facing the business from the lenders prospective. This insight is vital if a compelling case is to be made to lenders for support. Adaxial can be the interface between incumbent Management teams and stakeholders.
Capacity – the tasks facing management increase dramatically as time is compressed. Management have to deal with the day-to-day business, manage the requirements of stakeholders, who will wish to become increasingly involved in the business and at the same time, devise and implement a turnaround plan. Often, management underestimates the resources required to transition the business through the turnaround environment. An, experienced team of Adaxial do-ers, not report-writers, specialist consultants will recognise the business needs and formulate and implement plans to support the business.
